In addition, those possessions can have monetary or sentimental value. Some of those items that have sentimental value can include photographs or heirlooms that have been passed down within the family.

Of course, the problem with owning something is that it could be stolen. Or it could even be lost due to something like fire, flood, or some other natural cause. And naturally, there are plenty of thieves out there who would steal your possessions if given the chance.

One of the most critical things that can be stolen from you is something you can't actually hold in your hand. It's your identity. Identity theft has become a very serious problem and in order to prevent it, you need to understand it.

Just What Is Identity Theft, Anyway?

Identity theft occurs when someone misrepresents themselves as another person, usually for the purpose of committing fraud. This could include illegally accessing that person's financial accounts or committing criminal acts in their name.

One of the most common impacts of identity theft is financial loss of some sort. Identity theft can affect your finances and credit rating when the thieves are able to access your bank accounts, credit cards and other private information.

In addition, if not addressed quickly, an identity theft victim will have to deal with damage perpetuated on their good name. Often this damage is reflected in credit ratings, possible criminal activity, employment interviews, etc. Although the victim is innocent, often it takes months or even years for the devastating effects of the identity theft to be cleared.

How Identity Theft Works

Identity theft usually happens when someone obtains critical pieces of information about you.

These pieces of critical information are generally identification numbers or data that only the owner of that information is privy to. Some of those numbers could be social security numbers, personal identification numbers (PINs), passwords, a mother's maiden name, date of birth, etc.

If these numbers are obtained by an identity thief, they can use them to pose as you to banks, credit companies or other services. This personal information should never be given out glibly.

Often a company is very clear that they will never ask for these sensitive numbers unless the customer has initiated the call. In addition, often a company will only ask for the last four numbers of a person's 9 digit social security number.

Your trash is another source of this information for identity thieves. Don't ever throw out papers with personal information on it - make sure you shred it thoroughly first.